Egyptian stocks saw their fifth and final loss of the trading week Thursday, as optimism over new Turkish trade ties was tempered by a high-profile court ruling and the prospect of Friday protests.
The EGX30 benchmark slipped a further 2.69 per cent to land at 4,364.6 points, its lowest level since April 2009. The index has lost 8 per cent of its value since trade resumed Sunday in the wake of renewed unrest in Cairo.
"We weren't expecting this decline," said Issa Fathy, vice president of the securities division in Cairo's Chamber of Commerce. "The normal response to Erdogan's visit and the announcement of common investments between Egypt and Turkey would be for them to push the market up."
Turkish premier Recep Tayyip Erdogan made a much-heralded visit to Egypt this week, his four-day trip accompanied by a series of pledges about increased economic co-operation between Ankara and Cairo.
Turkish businessmen reportedly signed US$853 million worth of deals with their Egyptian counterparts during the week's visit, with Erdogan saying he wanted $5 billion of Turkish investment in Egypt in the near future.
But it was matters closer to home that defined the market's performance.
Ezz Steel plummeted 5.1 per cent to a 29-month low after a court sentenced its former chairman Ahmed Ezz to 10 years in jail on graft charges and levied a $111 million fine.
"We didn't see the fall because of the prison sentence but because of the other rulings. Investors are concerned about the court's demands over business licences and the fine. Who will pay this fine?" asked Fathy.
Losses for Egypt's major steelmaker had an impact on the rest of the already-weakened market, which saw foreign investors offload yet more high-cap stock.
From 179 listed stocks, 155 lost value and just 18 gained, with healthcare and pharmaceuticals the sole sector to finish in the green.
Market turnover of LE458.1 million -- much higher than previous days -- showed the effect of the foreign exodus, with non-Arab investors responsible for LE45.95 million of net-sales. Egyptians were the day's only net-buyers.
"The political tensions are continuing and here we are again, facing a new Friday," said Fathy, referring to demonstrations planned for the weekend to protest against the state's re-activation of emergency laws after protesters raided the Israeli embassy last Saturday.
Fathy cited the performance of the Commerical International Bank as a sign of international unease. The bank saw around an eight of the day's total trade, and plunged a further 5.5 per cent.
“CIB is always the victim of foreigners' retreat from the market,” he said.
Other high-caps like Telecom Egypt, down 2.33 per cent, and Orascom Construction, which slipped 0.84 per cent, added to the main index's woes.
The few gainers were low-cap stocks, led by El Orouba Securities which climbed a healthy 4.61 per cent. But the broader EGX70, which comprises more speculative shares, did even worse than the main index, finishing down 2.8 per cent.